Handout No.

02
UP LAW CENTER
BAR REVIEW INSTITUTE
2013 BAR EXAMINATIONS
LABOR LAW AND SOCIAL LEGISLATION
SUGGESTED ANSWERS
ESSAY QUESTIONS
I
Jose and Erica, former sweethearts, both worked as sales representatives for
Magna, a multinational firm engaged in the manufacture and sale of pharmaceutical
products. Although the couple had already broken off their relationship, Jose
continued to have special feelings for Erica.
One afternoon, Jose chanced upon Erica riding in the car of Paolo, a coemployee and Ericas ardent suitor; the two were on their way back to the office
from a sales call on Silver Drug, a major drug retailer. In a fit of extreme jealousy,
Jose rammed Paolos car, causing severe damage to the two company-owned cars
they were driving.
(A) As lawyer for Magna, advise the company on whether just and valid
grounds exist to dismiss Jose. (4%)
SUGGESTED ANSWER:
Jose can be dismissed for serious misconduct, violation of company rules and
regulations, and commission of a crime against the employers representatives.
Article 282 of the Labor Code provides that an employer may terminate an
employment for any serious misconduct or willful disobedience by the employee of
the lawful orders of his employer or his representatives in connection with his work.
Misconduct involves the transgression of some established and definite rule
of action, forbidden act, a dereliction of duty; willful in character, and implies
wrongful and not mere error in judgment. For misconduct to be serious and
therefore a valid ground for dismissal, it must be:
1. of grave and aggravated character and not merely trivial or unimportant
and
2. connected with the work of the employee.

ALTERNATIVE ANSWER:

Article 282(e) of the Labor Code talks of other analogous causes or those
which are susceptible of comparison to another in general or in specific details as a
cause for termination of employment.
In one case, the Court considered theft committed against a co-employee as
a case analogous to serious misconduct, for which the penalty of dismissal from
service may be meted out to the erring employee (Cosmos Bottling Corp vs. Fermin,
GR No. 193676/194303 [2012]). Similarly, Joses offense perpetrated against his coemployees, Erica and Paolo, can be considered as a case analogous to serious
misconduct.
(B) Assuming this time Magna dismissed Jose from employment for cause and
you are hired as the lawyer of Jose, how would you argue the position that Joses
dismissal was illegal?
SUGGESTED ANSWER:
The offense committed by Jose did not relate to the performance of his
duties.
For misconduct or improper behavior to be a just cause for dismissal, it (a)
must be serious; (b) must be related to the performance of the employees duties;
and (c) must show that the employee has become unfit to continue working for the
employer.
On the basis of the foregoing guidelines, it can be concluded that Jose was
not guilty of serious misconduct: Jose was not performing official work at the time of
the incident. (Lagrosas vs. Bristol Myers Squibb, G.R. No. 16863 / 170684 [2008]).
Additionally, there was no compliance with the rudimentary requirement of
due process.

II
Gamma Company pays its regular employees P350.00 a day, and houses
them in a dormitory inside its factory compound in Manila. Gamma Company also
provides them with three full meals a day.
In the course of a routine inspection, a Department of Labor and Employment
(DOLE) Inspector noted that the workers pay is below the prescribed minimum
wage of P426.00 plus P30.00 allowance, and thus required Gamma Company to pay
wage differentials.
Gamma Company denies any liability, explaining that after the market value
of the company-provided board and lodging are added to the employees P350 cash
daily wage, the employees effective daily wage rate would be way above the

minimum pay required b y the law. The company counsel further points out that the
employees are aware that their food and lodging form part of their salary, and have
long accepted the arrangement.
Is the companys position legally correct? (8%)
Suggested Answer:
No. The following requisites were not complied with:
(a) proof that such facilities are customarily furnished by the trade
(b) the provision of deductible facilities is voluntary accepted by the
employee
(c) the facilities are charged at the fair and reasonable value. Mere availment
is not sufficient to allow deduction from employees wages. (Mayon Hotel
& Restaurant vs. Adarna, 458 SCRA 609 [2005]).
ALTERNATIVE ANSWER:
No. Rule 78, Section 4 provides that there must be a written authorization.
III
Inter-Garments Co. manufactures garments for export and requires its
employees to render overtime work ranging from two to three hours a day to meet
its clients deadlines. Since 2009, it has been paying its employees on overtime an
additional 35% of their hourly rate for work rendered in excess of their regular eight
working hours.
Due to the slowdown of its exports business in 2012, Inter-Garments had to
reduce its overtime work; at the same time, it adjusted the overtime rates so that
those who worked overtime were only paid an additional 25% instead of the
previous 35%. To replace the workers overtime rate loss, the company granted a
one-time 5% across-the-board wage increase.
Vigilant Union, the rank-and-file bargaining agent, charged the company with
Unfair Labor Practice on the ground that (1`) no consultations had been made on
who would render overtime work; and (2) the unilateral overtime pay rate reduction
is a violation of Article `100 ( entitled Prohibition Against Elimination or Diminution
of Benefits) of the Labor Code.
Is the union position meritorious? (8%)
SUGGESTED ANSWER:
The allegation of ULP by the Union is not meritorious. The selection as to who
would render overtime work is a management prerogative.

However, the charge of the Union on the diminution of benefits (violation of

Article 100 of the Labor Code) appears to be meritorious. Since three(3) years have
already elapsed, the overtime rate of 35% has ripened into practice and policy, and
cannot anymore be removed. (Sevilla Trading vs. Semana, 428 SCRA 239 [2004]).
This is deliberate, consistent and practiced over a long period of time.

IV
Bobby, who was assigned as company branch accountant in Tarlac where his
family also lives, was dismissed by Theta Company after anomalies in the
companys accounts were discovered in the branch. Bobby filed a complaint and
was ordered to be reinstated with full backwages after the Labor Arbiter found that
he had been denied due process because no investigation actually took place.
Theta Company appealed to the National Labor Commission (NLRC) and at
the same time wrote Bobby, advising him to report to the main company office in
Makati where he would be reinstated pending appeal,. Bobby refused to comply
with his new assignment because Makati is very far from Tarlac and he cannot bring
his family to live with him due to the higher cost of living in Makati.
(A) Is Bobbys reinstatement pending appeal legally correct? (4%)
SUGGESTED ANSWER
No. It is not legally correct. The transfer of an employee ordinarily lies within
the ambit of management prerogatives. But like other rights, there are limits
thereto. This managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion, bearing in mind the basic elements of justice and
fair play. Thus, the transfer of Bobby from Tarlac to Makati must be done in good
faith, and it must not be unreasonable, inconvenient or prejudicial to the employee.
For another, the reinstatement of Bobby ought to be to his former position, much
akin to return to work order, i.e. to restore the status qou in the work place.
(Composite Enterprises vs. Capamaroso , 529 SCRA 470 [2007]).
ALTERNATIVE ANSWER
No. Under the Article 223 of the Labor Code, the reinstatement order of the
Labor Arbiter which is immediately executor even pending appeal, should pertain to
restoration to status quo ante.
(B)

Advise Bobby on the best course of action to take under the

circumstances. (4%)

SUGGESTED ANSWER

The best course of action for Bobby to take under the circumstances is to
allege constructive dismissal in the same case, and pray for separation pay in lieu of
reinstatement.

V
Cris filed a complaint for illegal dismissal against Baker Company. The Labor
Arbiter dismissed the complaint but awarded Cris financial assistance. Only the
company appealed from the Labor Arbiters Ruling. It confined its appeal solely to
the question of whether financial assistance could be awarded. The NLRC, instead of
ruling solely on the appealed issue, fully reversed the Labor Arbiters decision; it
found Baker Company liable for illegal dismissal and ordered the payment of
separation pay and full backwages.
Through a petition for certiorari under Rule 65 of the Rules of Court, Baker
Company challenged the validity of the NLRC ruling. It argued that the NLRC acted
with grave abuse of discretion when it ruled on the illegal dismissal issue, when the
only issue brought on appeal was the legal propriety of the financial assistance
award.
Cris countered that under Article 218 (c) of the Labor Code , the NLRC has the
authority to correct, amend, or waive any error, defect or irregularity whether in
substance or in form in the exercise of its appellate jurisdiction.
Decide the case. (8%)
SUGGESTED ANSWER
The review power of the NLRC in perfected appeals is limited only to those
issue raised on appeal. Hence, it is grave abuse of discretion for the NLRC to resolve
issue not raised on appeal. (United Placement International vs. NLRC, 221 SCRA 445
[1993])
ALTERNATIVE ANSWER
In the exercise of its jurisdiction, the NLRC is empowered to determine even
issues not raised on appeal in order to fully settle the issue surrounding the case.
[See : Article 218 (c), now Article 224 (c) ].
VI
Because of the stress in caring for her four (4) growing children, Tammy,
suffered a miscarriage late in her pregnancy and had to undergo an operation. In
the course of the operation, her obstetrician further discovered a suspicious-looking
mass that required the subsequent removal of her uterus (hysterectomy). After
surgery, her physician advised Tammy to be on full bed rest for six (6) weeks.

Meanwhile, the biopsy of the sample tissue taken from the mass in Tammys uterus
showed a beginning malignancy that required an immediate series of chemotherapy
once a week for four (4) weeks.
(A) What benefit can Tammy claim under existing social legislation (4%)
SUGGESTED ANSWER:
Assuming she is employed, Tammy is entitled to a special leave benefit of two
months with full pay (Gynecological Leave) pursuant to RA 9710 or the Magna Carta
of Woman. She can also claim Sickness Leave benefit with SSS Law.
(B) What can Roger Tammys 2 nd husband and father of her two (2) younger
children claim as benefits under the circumstances? (4%)
SUGGESTED ANSWER:
Under RA 8187 or the Paternity Leave Act of `1996, Roger can claim
paternity leave of seven (7) days with full pay if he is lawfully married to Tammy and
cohabiting with her at the time of miscarriage.
VII
Philippine Electric Company is engaged in electric power generation and
distribution. It is a unionized company with Kilusang Makatao as the union
representing its rank-and-file employees. During the negotiations for their expired
collective bargaining agreement (CBA), the parties duly served their proposals and
counter-proposals on one another. The parties, however, failed to discuss the merits
of their proposals and counter-proposals in any formal negotiation meeting because
their talks already bogged down on the negotiation grounds, i.e., on the question of
how they would conduct their negotiations, particularly on whether to consider
retirement as a negotiable issue.
Because of the continued impasse, the union went on strike. The Secretary of
Labor and Employment immediately assumed jurisdiction over the dispute to avert
widespread electric power interruption in the country. After extensive discussions
and the filing of position papers (before the National Conciliation and Mediation
Board and before the Secretary of himself) on the validity of the unions strike and
on the wage and other economic issues (including the retirement issue), the DOLE
Secretary ruled on the validity of the strike and on the disputed CBA issues, and
ordered the parties to execute a CBA based on his rulings.
Did the Secretary of Labor exceed his jurisdiction when he proceeded to rule
on the parties CBA position even though the parties did not fully negotiate on their
own? (8)
SUGGESTED ANSWER:

No. The power of the Secretary of Labor under Article 263(g) is plenary. He
can rule on all issues, questions or controversies arising from the labor disputes,
including the legality of the strike, even those over which the Labor Arbiter has
exclusive jurisdiction. (Bagong Pagkakaisa ng mga Manggagawa sa Triumph
International vs. Secretary, G.R. Nos. 167401 and 167407, July 5, 2010)

VIII
After thirthy (30) years of service, Beta Company compulsorily retired Albert
at age of 65 pursuant to the companys Retirement Plan. Albert was duly p[aid his
full retirement benefits of one (1) month pay for every year of service under the
Plan. Thereafter, out of compassion, the company allowed Albert to continue
working and paid him his old monthly salary rate, but without the allowances that
he used to enjoy.
After five (5) years under this arrangement, the company finally severed all
employment relations with Albert; he was declared fully retired in a fitting ceremony
but the company did not give him any further retirement benefits. Albert thought
this treatment unfair as he had rendered full service at his usual hours in the past
five(5) years. Thus, he filed a complaint for the allowances that were not paid to
him, and for retirement benefits for his additional five(5) working years, based
either on the companies Retirement Plan or the Retirement Pay Law, whichever is
applicable.
(A) After Alberts retirement at age 65, should he be considered a regular
employee entitled to all his previous salaries and benefits when the
company allowed him to continue working? (4%)
SUGGESTED ANSWER:
He would be considered a contractual employee, not a regular employee. His
salaries and benefits will be in accordance with the stipulations of the contract he
signed with the company.
The present case is similar to a case decide by the Supreme Court (Januaria
Rivera v. United Laboratories, G.R No. 155639 [2009]) where the court held that the
company, in employing a retired employee whose knowledge , experience and
expertise the company recognized, as an employee or as a consultant, is not an
illegality; on the contrary, it is a recognized practice in this country.
(B) Is he entitled to additional retirement benefits for the additional service he
rendered after age 65? (4%)
SUGGESTED ANSWER:

No. He cannot be compulsorily retired twice in the same company.

IX
Pablo works as a driver at the National Tire Company (NTC). He is a member
of the Malayang Samahan ng Manggagawa sa NTC, the exclusive rang-and-file
collective bargaining representative in the company. The union has a CBA with the
NTC which contains a union security and a check-off clause. The union security
clause contains a maintenance of membership in good standing with the union
during the terms of the CBA under pain of dismissal. The check-off clause on the
other hand authorized the company to deduct from union members salaries
defined amounts of union dues and other fees. Pablo refused to issue an
authorization to the company for the check-off of his dues, maintaining that he will
personally remit his dues to the union.
(A) Would the NTC management commit unfair labor practice if it desists from
checking off Pablos union dues for lack of individual authorization from
Pablo? (4%)
Suggested Answer:
No. under RA 9481, violation of the Collective Bargaining Agreement, to be an
unfair labor practice, must be gross in character. It must be flagrant and malicious
refusal to comply with the economic provisions of the CBA.
ALTERNATIVE ANSWER:
No. Check-offs in truth impose an extra burden on the employer in the form
of additional administrative and bookkeeping costs. It is a burden assumed by
management at the instance of the union and for its benefit, in order to facilitate
the collection of dues necessary for the latters life and sustenance. But the
obligation to pay union dues and agency fees obviously devolves not upon the
employer, but the individual employee. It is a personal obligation not demandable
from the employer upon default or refusal of the employee to consent to a checkoff. The only obligation of the employer under the check-off is to effect the
deductions and remit the collections to the union. (Holy Cross of Davao College vs.
Joaquin, G.R. No .110007 [1996])
(B) Can the union charge Pablo with disloyalty for refusing to allow the check
off of his union dues and, on this basis, ask the company to dismiss him
from employment? (4%)
SUGGESTED ANSWER:

No. The check-off in the CBA will not suffice. The law prohibits interference
with the disposition of ones salary. The law requires individual written
authorization to deduct union dues from Pablos salaries. For as long as he pays
union dues, Pablo cannot be terminated from employment under the union security
clause. As a matter of fact, filing a complaint against the union before the
Department of Labor for forcible deduction from salaries does not constitute acts of
disloyalty against the union. (Tolentino v. Angeles, 52 O.G. 4262)

X
For ten(10) separate but consecutively yearly contracts, Cesar has been
deployed as an able-bodied seaman by Meritt Shipping, through its local agent, Ace
Maritime Services (Agency), in accordance with the 2000 Philippine Overseas
Employment Administration Standard Employment Contract (2000 POEA-SEC),
AMOSUP, and Meritt Shipping. Both the 2001 POEA-SEC and the CBA commonly
provided that the same mode and procedures for claiming disability benefits.
Cesars last contract ( for nine months) expired on July 15, 2013.
Cesar disembarked from the vessel M/V Seven Seas on July 16, 2013 as a
seaman on finished contract. He immediately reported to the agency and
complained that he had been experiencing spells of dizziness, nausea, general
weakness, and difficulty in breathing. The agency referred to him to Dr. Sales, a
cardio-pulmonary specialist, who examined and treated him; advised to take a
complete rest for a while; game him medications; and declared him fit to resume
work as a seaman.
After a month, Cesar went back to the agency to ask for re-deployment. The
agency rejected his application. Cesar responded by demanding total disability
benefits based on the ailments that he developed and suffered while on board
Meritt Shipping vessels. The claim was based on the certification of his physician
(internist Dr. Reyes) that he could no longer undertake sea duties because of the
hypertension and diabetes that afflicted him while serving on Meritt Shipping
vessels in the last 10 years. Rejected once again, Cesar filed a complaint for illegal
dismissal and the payment of the total permanent disability benefits against the
agency and its principal.
Assume that you are the Labor Arbiter deciding the case. Identify the facts
and issues you would consider material in resolving the illegal dismissal and
disability complaint. Explain your choices and their materiality, and resolve the
case. (8%)
SUGGESTED ANSWER:
1. Does the Labor Arbiter have jurisdiction to decide the case?

2. Did Cesar submit to a post-employment examination within 3 days upon his

return? This is a mandatory requirement; otherwise, Cesar will forfeit his right
to claim benefits.
3. Is Dr. Sales the company-designated physician? The company-designated
physician is the one who initially determines compensability.
4. Was Cesar assessed by Dr. Sales (if he is the company physician) within `120
days?
5. If the 120 days was exceeded and no declaration was made as to Cesar's
disability, was this extended to 240 days because Cesar required further
medical treatment?
6. Was the 240 days exceeded and still no final decision was reached as to
Cesars disability? If so, Cesar is deemed entitled to permanent total disability
benefits.
7. If the companys physician and Cesars physician cannot agree, was a third
physician designated to determine the true nature and extend of the
disability. The third physicians finding under the law is final and conclusive.
8. In the matter of the complaint for illegal dismissal: There is none because
Cesar disembarked on a finished contract.
9. Seafarers are contractual employees, for a fixed term, governed by the
contract they sign; an exception to Article 280 (now article 286) of the Labor
Code. Hence, the complaint for illegal dismissal will not prosper.